IDC Continues Its Curious Love Affair with Windows Phone

I love Windows Phone, but I’m not delusional about its position in the market place. The market researchers at IDC, alas, are delusional. And they still believe that Microsoft’s little-used mobile platform will somehow establish itself as the clear number three choice behind Android and iPhone.

That said, IDC is at least being a bit more realistic: Instead of the 20 percent market share it predicted for Windows Phone by 2015, IDC now predicts a more realistic 11 percent market share by 2016.

IDC’s latest report on smart phone market share is, at least, entertaining. The big picture stuff is that Android is number one and will continue to be number one for the foreseeable future. iPhone, too, will maintain its number two position, and control only one-third the market of Android.

And now the fantasizing begins.

In IDC’s view, Windows Phone is the only smart phone platform that grows market share over the next four years. In fact, it grows an incredible 71.3 percent during this time period, which of course is the only way you can get from nowhere (2.6 percent market share in 2012) to the utterly unobtainable and fantastical height of 11.4 percent market share that IDC predicts for 2016.

“Windows Phone will build on the progress it made in 2012, with Nokia establishing its presence and HTC solidly jumping back into the race,” IDC notes. “Moreover, contributions by Samsung, ZTE, and Huawei will help grow its footprint. With more vendors releasing more devices aimed at multiple segments, sales associates will be better positioned to tell a compelling Windows Phone story and to explain the value of Windows Phone's differentiated experience compared to market leaders Android and [iPhone].”

There’s even a chart. I’ll zoom in a bit so you can actually see the real Windows Phone market share, which appears only in the first column; the other two are predictions. It’s the red line. About one pixel high.

So. What are we to make of this?

Best case scenario—i.e. IDC’s downwardly revised prediction of today—Windows Phone accounts for just over 10 percent of the smart phone market by 2016, a full SIX YEARS after the platform was first launched. With the understanding that I’m usually not the sunniest guy in the world, there’s no way to contort that into good news. There just isn't.

Discuss this Article 21

Besides a few things re: the eco-system, there isn't a whole lot Microsoft can do to push WP at this point. The platform is good, the hardware is good, the tools available to developers are excellent - now it is up to the market.

...but MS and OEMs can choose their market. The high-end segment is taken by iOS and Galaxy, and saturated with countless Android devices. The real driver for growth is going to be in the mid/low-end segment, especially in markets where people (on budgets) could care less about eco-system loyalty (e.g. Middle East, South Asia, Far East Asia, etc).

The HTC 8S and recently-announced Lumia 620 (dual-core with NFC, FFC, removable battery and micro-SD card slot) coming in at $249.99 SIM-free is going to be key.

I believe cheap smart phones sell best (with few exceptions). I believe cheap smart phones actually made the breakthrough for android.
For WPs the adduplex statistics clearly show that the cheaper options sell better (specifically lumia 710). I though think for WP it is a very limiting factor that there are no devices between USD 100 and USD 150. That would probably generate market share ...

With Android costing nothing but R&D, and each Windows Phones carrying a considerable license fee to MS, Android makers do and will own the low end by simply being able to undercut any WP pricing. You cannot currently make a cheap WP with a sufficient profit margin. As such, MS should give WP 7.5 licenses for free to allow the ecosystem grow. And, of course, they should also keep maintaining the WP 7 line. MS needs market share. But it does not want it for what ever reason.

Android does cost more than just R&D and includes license fees to MS, Apple, and Nokia. Or legal fees to fight them. Not exactly free. Would like to know what kind of income MS derives from it's licensing, but has to be pretty healthy, and will be more so in future when Google/Motorola will be forced to license non-essential MS and Apple patents.

Windows Phone already IS the clear #3 choice in the market. I don't know what other players you see. RIM? ...Maybe. Judging by personal experience, Windows Phone is at least being recognized by the general public. I too find the numbers far fetched but there's no doubting that WP has momentum right now.

I love my WP, have since the WP7 launch 2 years ago. Microsoft does so much with so little. That is, it is fast, fluid, and functional on, essentially, last generation hardware. I've tried using iPhone and Android. The bulk of the features I use on a smart phone are simply better with WP. I have one phone I use for my personal and professional life. I do not feel comfortable trusting my professional data to Android. I think they are 1 good hack/virus away from collapse. Perhaps Android is good for those that don't use it for anything private. I guess the price is right (Scroogle gives it away), but then there is all the IP license fees that hardware companies have to pay so maybe it's not free. I just don't get it.

To me it comes down to one thing... the success or failure of Apple. History shows that every time Apple takes control of a market, their most "open platform" competitor (Windows or Android) comes in and takes over... often by force in flooding the market.

Apple's refusal to be cooperative and instead be a walled garden has always been their weak spot. As such, I never understand why Microsoft starts off trying to copy them.

On the other hand, being aggressive the way Android has been is the OLD Microsoft approach, and we know how turns out... legal soup.

So this time around might be Microsoft doing things right. I do think that Apple will fade from the limelight by 2015's end. I don't believe they can continue with the lackluster specs and announcements they've had this year and survive. They're in copy mode instead of leader mode, and people will take notice.

The more that remains true, the more chance Microsoft has to grow... but they STILL have to market it and convince developers and users alike to embrace it. The marketing is definitely there this time around, but I have yet to see the flood of developer adoption. They also need to stabilize their service offerings... fix the glitches and continually update features. They need to understand that frequent incremental releases are better than infrequent big releases.

"They're in copy mode instead of leader mode, and people will take notice."

Apple, like MS, is in transition mode right now. It'll be at least 2 to 3 years to get a good idea to see if you're or not, so we'll see.

Regarding this article, I don't think it's unrealistic for WP OS to capture at least 11% market share in four years' time. The mobile device market is huge, two to three times bigger than the traditional PC market so there's room for many players to be successful and profitable. Here's how I see the landscaping shaping up in four years' time in the smartphone market;

Android - 40%
iOS - 20%
WP - 20%
RIM (BB10) - 20%

Sound crazy? I don't think so. Every one of those players has a quality OS, strong user base, and a robust ecosystem to support it.

"... History shows that every time Apple takes control of a market, their most "open platform" competitor (Windows or Android) comes in and takes over... often by force in flooding the market."

This completely false statement gets constantly repeated in various forms.

The facts are these: Apple has never lost a market it controls (control == largest market share). Apple has only ever controlled two markets: MP3 players via the iPod and Tablets via the iPad. Apple still controls both, a decade later with a 70% share in the case of the iPod, and with a majority share of various degree depending on whose statistics you are looking at with the iPad. In both cases there have been "more open" competitors such as Plays For Sure in the MP3 player market. Thus far, the "more open" competitors have failed. If Apple loses control of either of these two markets, your statement will be coming true for the first time.

On the other hand, in the case of markets Apple does not now control, Apple has never controlled those markets:

Computers: In the days of the Apple ][ and post 1984 the Macintosh, the most popular personal computers were the TRS-80, 1977~81; the Commodore 64 (82~85); the IBM PC and compatibles (1986 -) (at the time running MS-DOS, now Windows). Apple never came close to having "control" of the PC market so they could then "lose it" to the "more open" competitor.

Same with the smartphone market: the iPhone was originally behind Blackberry and Symbian, it is now behind Android. It never had a market share lead to lose -- indeed its US market share it probably its highest ever right now in December 2012. You could argue that Apple has had control of the phone market as judged by criteria other than market share - profit share and mind share. But under this definition, Apple has never lost them: it still has a large lead in profit share with the iPhone, and mind share as well -- it still attracts more developers, more exclusive apps, more "iPhone first" apps and has more influence than its competitors.

Predictions are hard. No one predicted how Android completely overtook every other brand including Apple. Can Windows Phone compete? Perhaps it should offer the same strategy as Android in some ways to gain marketshare, but the problem is it is imitating Apple. Apple's strategy will not work for Windows Phone.

Windows Phone CAN be the better Android. It can offer a better experience if it tried harder. The Android OS is a mess. I really hate it. Unfortunately, Microsoft doesn't do a good job with services. The Windows Phone ecosystem is a mess and you documented how Microsoft doesn't present its services outside of a select few countries.

I wish the Windows Phone marketshare will improve, but Google has many years of experience when compared with Microsoft. It is a shame.

A closed and proprietary WP will never match Android in market share, no matter how many years will pass. The small Chinese Android mills that pump out millions and after millions of devices for Asia will not suddenly start paying MS for something they get for free from Google. That is how they keep in business -- just barely.

WP can gain some market share in Europe and North America. But I do not see them going anywhere, well, anywhere else... unless MS makes drastic strategic changes. But it seems they prefer a miniscule, profitable market to a large low- or non-profit one.

I actually think these numbers are more realistic. I'd love to believe their original 20% was accurate, since Windows Phone is so clearly superior to iOS and Android, but growing 8% in 3 years seems much more likely than 17% in 2. Of course, IDC and other analysts are hilariously flip-floppy, so we can't rely on them.

Anecdotally, I do see a surprising number of students at my college with Windows Phones. I don't know if that means Microsoft's marketing is working, but it's certainly encouraging.

I don't think these numbers are crazy at all. First, we are talking world market share and with Nokia announcing lower end models on top of the 920 getting a deal in China that Apple has yet to get we are starting to see motion.

We also see numbers all the time that unlike iOS users who spend money on apps etc, Android users are not as tied to their devices with money and those people can move easily. There were a number of users who went Android because they were not on ATT and didn't want to switch or just didn't want an iPhone so took the next best choice. Look how quickly Blackberry has fallen, you can see numbers the other way as well.

If Windows Phone 8 becomes the extension of Windows 8 that it was promised to be then I think these numbers are realistic. Currently the relationship between WP8 and Win8 is tenuous at best with the lack of wireless sync, DRM issues and horrible Xbox Music experience.

If they ever solve this shortcoming and accelerate the pace of feature enhancements and bug fixes on the WP8 platform adoption could quickly accelerate due to that massive Win8 and Xbox gaming user base.

Unfortunately right now, an iPhone with iTunes integrates with my PC better than my WP8 device and that's just sad.

I suspect that Paul has become more pessimistic about WP and W8 because he is not a regular prime-time TV watcher. Windows has stolen the air waves from Apple and Samsung. The phones and tablets are everywhere in the ads, and some prime time shows like Bones and Hawaii 50 have the Windows 8 desktop displayed throughout the show. (Even the original horizontal Surface!) All they have to do is make a phone that can call other phones and they'll be number 1.

Paul, I agree with you that the IDC numbers do not seem to have any discernable reasoning. But neither does your evaluation of them. Honestly, I think reading future from tea leaves or flipping a coin is all we can do at the moment and it will be just as "valid". The thing is, anything can happen in those four years. The combination of current and future MS products may create the perfect storm and lead to a, let us say, 40 % market share. Or the chemistry will somehow fail to ignite and it will fail horribly. For all we know MS might withdraw from the mobile market in 4 years. We simply do not have the data to do any serious predictions. Unfortunately for IDC they are in the business of predictions so they HAVE to make some. I certainly would not bet my money on it one way or the other, though.

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